Uncapped Merchant Accounts - Account Limits and Service Providers

Using discretion when choosing a merchant account is very important, since if you don’t make the right choice you can end up paying high fees every month. The amount of business a merchant conducts every month will initially determine the different limits (“caps”), restrictions and requirements that will be set for a specific account with a particular account provider.

Merchants can’t always determine how much business they will complete in each month, especially when just starting out or in a growth phase, but if a merchant can estimate the revenue that they it collect, its can make a difference when it comes to fees down the line.

The Next Steps

Once a merchant has higher volumes of revenue coming in, they should consider an uncapped account. Uncapped account allow for merchants to have basically no restriction on their account volume. With capped accounts, on the other hand, merchants have a certain limit amount that they cannot surpass. This allows the account providers to make sure that there are not too many chargebacks occurring on the account. When a provider is satisfied with a merchant’s account management, an uncapped account could be in the offing. With an uncapped merchant account, there is no worry for merchants if they happen to exceed the allotted amount on the account.

There are only a few service providers that will offer uncapped merchant accounts due to the high risk of chargebacks that can happen, in addition to other risks. However, there are some that will accept the risk because the contract will include the fees associated with chargebacks. Uncapped merchant accounts are great for ecommerce website companies that handle a lot of transactions from other countries.

The risk on the part of the merchant exists as well, but in a different sense. Typically, merchants who experience problems with risk do so because of chargebacks, many of these because they are dealing with industries that are more likely to have chargeback problems. “High risk” merchant accounts often deal with travel, real estate, consumer electronics, computer hardware, software, etc.

Decisions, Decisions

The fact is, when choosing a merchant account the fact that it’s capped or uncapped makes a huge difference for certain merchants. It’s best to get advice from financial and business experts when choosing both an account provider and the kind of account to open. As mentioned before, not all merchant providers will implement an uncapped account due to the high risk factors involved. However, there are a chosen few that will. So, do the research and investigate thoroughly before choosing the right provider for the needs of you business.